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Disrupting insurance

Tech disruption of the insurance industry will start with the on-demand economy. You can see it in Business Insider’s diagram of “The Fintech Ecosystem”

See that little section labeled “Insurance” in the bottom middle? That’s a reflection of the future. The future is on-demand resources when you need it and that will be the source of disruption for insurance.

Cloud computing offers compute resources when you need it. Uber offers on-demand transportation. Upwork offers an on-demand workforce. The future is pay for it when you need it. The missing gap is both insurance when you need it and support services for an on-demand economy.

The industry is starting out simple. Not to overuse the phrase, but Metromile is “The Uber of auto insurance”. Its car insurance offered via an app in a “pay-per-mile” fashion. It allows a variable pricing model based upon risk. Your risk profile when you’re driving commercially vs. privately is completely different, so why not optimize on demand? It can readily go further than that as well. Given the right data, one could readily track your driving style to understand your risk profile in a much more intimate way. It’s a great example of disruption of traditional auto insurance. It’s not only insurance when you need it, it’s also applied data science.

There are many coming opportunities for disruption in the insurance market. Both in supplying this style of on-demand insurance but also in supplying insurance and financial services to the on-demand workforce themselves. Just as computing and transportation are moving on demand, so too is the workforce. What services are available to support the on-demand worker? Car insurance, health insurance, pensions, liability, etc? When and how do they need it and how does it adapt to their needs?